IRIDEX Corporation Q4 FY2025 earnings call

Growth Focus - Glaucoma: Expand G6 user base, target high-volume MIG surgeons using MedScout intelligence, drive utilization among existing installed base. - Retina: Pursue international regulatory approvals, accelerate Pascal install-based replacement cycle domestically. ### Cost Focus: Continue transition to contract manufacturing, minimize production at headquarters, advance facility relocation. Achieved goals in 2025 to streamline operations, reduce costs, and achieve positive adjusted EBITDA and positive cash flow from operations in Q4 2025. Strong Q4 performance due to contributors like cost right-sizing initiatives, progress in relocating functions, and commercial efforts at the American Academy of Ophthalmology annual meeting leading to large number of leads and orders.

For the full year 2025, revenue was $52.7 million, up 8% year over year. Fourth quarter growth was 16%. Glaucoma: Fourth quarter sold 15,900 probes vs 13,300 prior year, 44 G6 systems vs 47 Q4 2024. Full year 2025 sold 57,800 cyclo-G6 probes vs 55,400 prior year, 133 G6 systems vs 125 2024. International glaucoma had strong performance in some geographies but was impacted by Iran conflict in Middle East. Retina: Priorities include Pascal adoption and regulatory approvals. Medical and surgical retina revenue did well, surgical retina was a standout. International retina had mixed performance with some regions impacted by macro dynamics and conflict, but underlying demand remained solid. Fourth quarter gross profit was $5.5 million, gross margin 37%, operating expenses $5.5 million, net loss $0.2 million or one cent per share.

Expect to generate revenues of between 51 and 53 million in 2026. Guidance contemplates no sales in the Middle East. On a proforma basis, adjusted to exclude Middle East revenue in 2025, guidance represents 2026 growth of 1 to 5 percent compared to 2025. Adjusted operating expenses, excluding depreciation, amortization, and stock compensation, are expected to be in the range of $19 to $19.5 million.

Conflict in Iran is impacting sales in the Middle East materially. Evolving tariff uncertainty with China continues to challenge sales and forecasting. Headwinds in Japan for near-term results. Macro-economic conditions in Asia impacting commercial activity. Increase in overall manufacturing costs including product costs associated with tariff developments and lower capitalization of manufacturing overhead as inventory levels declined.

Q: When thinking about your 2026 guidance, how large is the Middle East in terms of revenues?

A: It's 5% of total revenue base, 10% of U.S.

Q: Is the sequential decline in other revenue just typical variability?

A: Basically dependent on service product lines, stays around same level plus or minus 100,000.

Q: Is there a trend of pricing down for G6?

A: OUS driving that down, in U.S. increased ASPs on probes and systems.

Q: How to think of organic growth rates for retina segment?

A: With Pascal product, has momentum, faster than competition, expect increase as get more MDR approvals globally